May 30, 2008 (Computerworld) Bank of New York Mellon Corp. officials last week confirmed that a box of unencrypted data storage tapes holding personal information of more than 4.5 million individuals was lost more than three months ago by a third-party vendor during transport to an off-site facility.

The bank informed the Connecticut State Attorney General's Office that the tapes belonging to its BNY Mellon Shareowner Services division were lost in transport by off-site storage firm Archive America on Feb. 27. The missing backup tapes include names, birth dates, Social Security numbers, and other information from customers of BNY Mellon and the People's United Bank in Bridgeport, Conn., according to a statement by Connecticut Attorney General Richard Blumenthal.

Archive America refused to comment about the missing backup tape, citing confidentiality agreements. A People's United Bank spokesman could not be reached for comment.

BNY Mellon Shareowner Services, which includes handling employee stock option plans, said that it has begun notifying affected clients. It contended that none of the unencrypted data has been accessed or used.

"We'd like to provide people with a more current characterization [of what happened], but we are not yet in a position to make that available," said BNY Mellon spokesman Ron Sommer. "Our intention is to make it available as soon as we can."

Blumenthal said that the bank's offer of a year of freed credit monitoring to those affected by the breach is "grossly inadequate." He also slammed the bank for not promptly notifying customers of the security breach.

"The loss of this tape — so far unrecovered and unremedied — is inexplicable and unacceptable," wrote Blumenthal. "I am especially concerned by the delay in informing customers, possibly heightening the risks of wrongdoing."

Blumenthal said that he is working with the New York and New Jersey attorneys general and the Connecticut Department of Consumer Protection to investigate the breach. Further, he said that he is pressing the bank to explain how some backup tapes disappeared while others on the same van arrived intact at the Archive America facility.

This week, a lawyer representing 40 affected individuals filed a class-action lawsuit against the New York bank in Connecticut Superior Court. Attorney Michael Stratton, who represents the plaintiffs, said he is seeking up to seven years of free credit monitoring and credit insurance for customers, along with unspecified damages.

"It's inconceivable to me that you have unencrypted data on tapes being transported and stored. I can't imagine why you wouldn't have a sophisticated encryption program to make it virtually impossible to break the code even if they were to become lost," remarked Stratton.

A new website - www.theyfailwepay.com - has been launched that seeks to stop the Chattanooga Electric Power Board from launching a cable television venture.

The site does not say who is behind it, but it is apparently an effort of Comcast and the state cable TV association.

The website has a section for citizens to sign a petition to the City Council.

The online petition says:

"Members of the Chattanooga City Council,

"I am petitioning you today in hopes that you will tell EPB that their cable and Internet plan is not the best course for the residents of Chattanooga.

"We all believe that competition is a good thing, but not at the expense of taxpayers. And at a time when energy costs are climbing, I cannot in good conscience let the EPB cable and Internet plan go unchallenged."

The City Council earlier approved the $210 million fiber optic plan. EPB officials said they hope to be signing up cable TV customers by the end of the year.

The website seeking to stop the venture claims taxpayers will pay if the EPB effort fails.

It also says EPB has lost $15 million on a telecom (phone and Internet) venture and not made any principal on a $28 million loan to start that effort.

The site says, "They fail, we pay. That is what's at stake in the EPB cable and Internet debate in Chattanooga.

"EPB would like to build a network and go into the cable and Internet business. Tennessee law is clear: public electric revenues cannot be used to subsidize cable and Internet operations. EPB is using an electric bond to finance the construction of the network. As such, we believe EPB is not following the rules and their decision to build the cable and Internet network is being challenged in court.

What's more is that a similar communications and Internet project was attempted by the city of Memphis and failed costing electric customers money. Chattanooga can't afford the same type of mistake.

"Finally, EPB's financial record with new businesses is less than stellar. EPB's Telecom division has lost millions and has yet to make a single principal payment on the $28 million they borrowed for their phone business.

"Simply put, EPB's plan and track-record is in question and, if they fail, we pay in higher electric bills.

"So please spend some time getting the facts on EPB and consider signing the petition on this page that we will submit to the Chattanooga City Council in hopes they might think twice about their cable and Internet plan." The Chattanoogan